Stock market soars on change of PM

At 1207 AEST, the benchmark S&P/ASX200 index was up 27.

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9 points, or 0.62 per cent, at 4514, as Julia Gillard made her first statement after being elected leader of the Labor Party.

The broader All Ordinaries index was 21.5 points higher, by 0.46 per cent, at 4530.9.

On the Sydney Futures Exchange, the September futures contract was 29 points higher at 4,503 points, on volume of 17,281 contracts.

The gains were led by resources with the market assuming a change in government leadership may be bring some change of direction on the resources super profits tax (RSPT).

Ms Gillard said she would call an election in coming months and would throw her door open to miners to end uncertainty.

Ms Gillard said the government would cancel its RSPT advertising and called on the resource industry to do the same, as a sign of good faith.

Ms Gillard said she was committed to returning Australia’s budget to surplus by 2013. Bell Financial Group senior adviser Chris Kimber said resources stocks were surging on expectations that the government now would make changes to the RSPT.

“All of the mining stocks are responding to the leadership change,” Mr Kimber said.

“People are expecting Gillard to water it down or alter it completely.”

Mr Kimber said the market was hoping the government would increase the rate companies start paying tax on profits above six per cent and abolish the 40 per cent rebate for loss making projects.

Rio Tinto climbed $1.25, or 1.77 per cent, to $71.79 and BHP Billiton was 64 cents higher, or 1.64 per cent, at $39.78.

The big four banks were mixed, with ANZ up 14 cents at $23.02, NAB was nine cents higher at $24.76, Commonwealth was down 14 cents at $51.07, and Westpac was 17 cents lower at $22.39.